Corey contends Clear Channel owes $15 million in back rent

The Atlanta businessman who on Monday won a $17.5 million judgment from the city of Atlanta in an airport advertising dispute, said a company at the center of his complaint owes City Hall $15 million in back rent.

Billy Corey, chairman of Corey Cos., said Tuesday a provision in a contract between the city and a predecessor billboard company that Clear Channel Outdoor Inc. later acquired, calls for the city to collect 25 percent more in rent at Hartsfield-Jackson International Airport upon expiration of that contract. By Corey's attorneys' calculations from a 1997 expiration date, Atlanta is owed $15 million by Clear Channel and Barbara Fouch, its minority partner in the airport contract.

Clear Channel rejected Corey's claim.

Monday's U.S. District Court judgment calls for Corey to receive $8.5 million in compensatory damages, a third each coming from the city, Clear Channel and Fouch. The remaining $9 million in punitive damages is to be divvied up between Clear Channel, which was ordered to pay $8.5 million, and Fouch, who must pay $500,000.

Corey has long held that bidding process at the airport has been corrupt, with contracts being awarded to people with deep connections to City Hall. Fouch, whose business interests at the airport go back to 1981, was close friends with former Mayor Maynard Jackson.

Former Mayor Shirley Franklin, who took office in 2002, said on Tuesday she ordered more than 40 expired contracts, including the Clear Channel/Fouch deal, be rebid. She said she also sought to change the culture at City Hall regarding its procurement process.

"I put in place checks and balances into the procurement process in 2002 and 2003 based upon national best practices. I supported the city's independent internal auditor, proposed the city's independent ethics officer and supported the establishment of the compliance officer in the Law Department," Franklin said in a statement. "My support of these steps strengthened transparency in all city operations, including in the procurement process.

"Both the ethics officer and the internal auditor report independently to boards comprised of a majority of private citizens. All of their findings and reports are made public. These elements increase transparency and integrity in the processes."

Corey, who filed his federal suit in 2004, contends the back rent would more than cover the city's portion of the judgment.

"The city can certainly make that claim on Clear Channel," Corey said at a news conference in his downtown offices. "There seems to be a very simple way for the city to resolve this."

The city and Clear Channel both vow to appeal the verdict.

“The argument that Clear Channel owes back rent has no basis factually or legally,"Clear Channel senior vice president Tony Alwin said in a statement. "The testimony at trial was undisputed on that point. The plaintiff never raised this claim during the six-year pendency of the case until opening statements."

A spokesman for Atlanta Mayor Kasim Reed said how much, if any, back rent is owed is unknown.

“If there is some back rent owed to the city, that’s something that we’re going to be interested in looking at, but as far as what the figure is and what’s involved [is undetermined],” Reese McCranie said.

Clear Channel's and the city's plan to appeal means legal fees for both sides will continue to rise.

Tex McIver, an attorney with Fisher & Phillips, the firm representing Corey Cos., said the company's legal fees are between $3 million and $3.5 million. And that doesn't include July's bill, where the nearly two-week trial cost about $80,000, he said.

The company said it will ask the presiding Judge Charles A. Pannell Jr. to order the city, Clear Channel and Fouch to pay those fees, in addition to the jury's judgment.